Corn fell from a 12-week high in Chicago and soybeans declined the most in two months on speculation that wet, warm weather in the U.S. will accelerate crop development, boosting yields. Wheat futures declined.
Most of the Midwest and northern Great Plains will have a timely mix of rain, warmer temperatures and sunshine, boosting crop development that has been curbed by late planting and cool temperatures in the past six weeks, World Weather Inc. said in a report to clients. The National Weather Service forecast normal weather for the next three months, and further improvement in drought conditions in the western Midwest and Plains.
“The forecasts are not crop threatening,” Dan Cekander, the director of grain-market analysis for Newedge USA LLC in Chicago, said in a telephone interview. “The crop potential is getting bigger and it looks like the U.S. outlook is improving for rising supplies.”
Corn futures for delivery in December, after the U.S. harvest, lost 1.8 percent to close at $5.605 a bushel at 1:15 p.m. on the Chicago Board of Trade. Yesterday, the contract jumped 3.6 percent to $5.705, the highest settlement for the contract since March 27.
Soybean futures for delivery in November fell 2 percent to $12.85 a bushel on the CBOT, capping the biggest drop for the contract since April 15.
The U.S. Department of Agriculture projects domestic corn and soybean output will rise to a record, rebounding from a drought last year that damaged crops and eroded supplies. The agency will update its forecast of planted acreage on June 28.
Agriculture markets also fell amid concern that a strengthening dollar would hurt demand for supplies from the U.S., the world’s largest grower of corn and soybeans. The USDA’s weekly export sales report today showed slowing demand for grains and oilseeds, Cekander said. The Dollar Index, a measure against six currencies, rose 0.6 percent, extending yesterday’s 1 percent increase, after the Federal Reserve said it may phase out its stimulus.
Wheat futures for delivery in September slid 0.9 percent to $7.0775 a bushel in Chicago, the first drop in three sessions.